The Asian Development Bank (ADB) on Wednesday entered into a phase of long-term partnership with Bihar, as its representatives, along with that of the Centre and the Bihar State Electricity Board (BSEB), signed a new tranche of loan worth $132 million in Delhi for strengthening the state’s power sector.

Of the total loan provided by ADB, $130.3 million would be utilized to finance infrastructure development, which includes installation of transmission lines and renovation (modernization) of both the transmission and power distribution facilities. The remaining $1.9 million would be used for the capacity building of the BSEB.

The loan of $132 million (or around Rs 606 crore) is a part of the $153.9 million (or around Rs 708 crore) worth of the project in the power sector that the ADB had earlier sanctioned for the state. The ADB amount is coming as loan to the state, while the Bihar government would provide the monetary value of the remaining 14 per cent (or Rs 102 crore) to the BSEB.

Given the state’s strong implementation performance of that loan, the second State Highway Project loan was approved in 2010, he also said, adding that an active consideration of the loan for urban development this year and another tranche for the second Power Improvement Project would be provided in 2014.

The approved power project valued at $153.9 million is expected to be completed by December 31, 2015. It is aimed at providing\transmitting additional over 4.72 lakh megawatt-hours (MWh) to consumers annually by the end of 2015. It would also help in reducing system losses by three per cent by 2016 in the seven districts of the state — West Champaran, East Champaran, Begusarai, Bhojpur, Buxar, Samastipur and Nalanda.